Is it safe to rely on an artist's impression when buying a new apartment 'off-the-plan'?

As the term suggests, when buying 'off-the-plan' a purchaser can only assess what it is they will be buying from the plans and images provided by the developer. The detail and accuracy of the plans and images will vary from one project to another, and may depend on how early the project goes to market and how advanced (or not advanced) the design work is at that time.'  There is also often an element of 'selling the dream' in the way a project is promoted.'  We've all seen the glossy brochures and computer generated images of completed developments, often with an 'artist's impression' footnote in the small print. A recent decision of the Federal Court considered whether marketing material containing an 'artist's impression', that turned out not to be realistic, could be relied on by the purchaser to cancel the contract.'  The case was Ripani v Century Legend Pty Ltd where the developers used a computer generated image, known as a render, in their marketing of the apartment, which illustrated a flush to the floor, seamless transition from living area to outdoor terrace, despite knowing that from an engineering perspective, it was impossible to construct the apartment in that way. Justice Paul Anastassiou held that the render, despite being described as an 'artist's impression', amounted to a representation which was important to, and relied upon by, the purchaser, and therefore entitled the purchaser to cancel the contract. These types of cases will often turn on the specific facts and circumstances, and so it is important to look at the details of the case.

Background

In 2017 Century Legend Pty Ltd was developing a multi-storey apartment building to be known as 'the Victoriana'. Marketing materials included floor plans and renders of what the development, and individual apartments, would look like when finished. A render of apartment 14.01, which was used widely as a 'hero shot' in promoting the Victoriana, illustrated a large free-span opening between the inside of the living areas and the outside terrace, i.e. the indoor and outdoor areas would flow seamlessly into each other when the doors were drawn back. ' The purchasers, Walter and Nina Ripani, were very much taken by the images and signed a contract to buy this apartment for $9.58 million. When they were later told that the free span opening as depicted in the marketing material was not achievable, they sought to cancel the contract on the grounds of misrepresentation. In order to succeed in their claim, the Ripanis needed to show two things '€“ that the marketing material did convey the representation alleged, and secondly that they relied on that representation in agreeing to buy that apartment and signing the contract.

Did the render convey the representations as alleged by the Ripanis?

Although the image was an artist's impression, i.e. conceptual and did not contain any dimensional notations, it clearly depicted the scale of an opening which extended almost entirely the length of the living areas adjacent to the terrace. It was irrelevant that the render was not a 'precise depiction' of apartment 14.01. Further, the words 'artist's impression' on the image do not suggest that the key elements of the render would not be constructed. While Century Legend contended it was 'patently unrealistic' to have a large void without any mullions, Justice Anastassiou rejected this argument outright because it was not unrealistic to the purchasers or the agent who was promoting the apartment to the purchasers. The disclaimer that the image may not necessarily depict the finished state of the property inside the marketing brochure, which was 'barely legible', was vague and ineffective especially when considering the stark disparity between the representation and the true state of affairs. Importantly, there was no reasonable basis for making the representations because Century Legend was warned by their architects, prior to using the 'hero render' in their marketing, that it was impossible to construct apartment 14.01 in the way in which the image depicted.

Did the Ripanis rely upon these representations when entering into the contract?

The render was displayed prominently on the wall of the display suite at the Victoriana, as well as the brochure for apartment 14.01. When visiting the display suite, the Ripanis disclosed to the agent that they were greatly interested in the seamless indoor-outdoor feature. While an architect attached to the project insisted that she informed the Ripanis of the impossibility of the free span opening in 2017, the Ripanis gave evidence that they did not discuss the feature prior to purchasing as they thought it 'was a given' that the apartment would have a large opening onto the terrace given the major promotional picture.

Would the Ripanis have entered into the contract had they not believed that the apartment would be constructed as depicted in the render?

This free span opening was a feature of the apartment that was of significant attraction to the Ripanis as they were specifically looking for an apartment with a suitable outdoor area for entertaining guests. Justice Anastassiou concluded that, had the Ripanis been told the apartment would or could not be constructed to the design depicted in the render, they would not have agreed to purchase it.

Outcome

The contract was cancelled and the court ordered return of the deposit and payment of damages to the Ripanis.'  However, the case is not over yet, as Century Legend has lodged an appeal. Are you looking to purchase a property off the plan and want to be sure you're getting what you've been promised?' Hunt & Hunt's Property Team can assist you with all aspects of our property transaction.'  Contact our team today.

---

~ with' Pippa Thorne,' Graduate-at-Law